Yahoo Finance Institutional investors have a lot riding on NVIDIA Corporation (NASDAQ:NVDA) with 67% ownership
Key Insights
Institutions' substantial holdings in NVIDIA implies that they have significant influence over the company's share price
44% of the business is held by the top 25 shareholders
A look at the shareholders of NVIDIA Corporation (NASDAQ:NVDA) can tell us which group is most powerful. With 67% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And as as result, institutional investors reaped the most rewards after the company's stock price gained 5.9% last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 214%.
In the chart below, we zoom in on the different ownership groups of NVIDIA.
Check out our latest analysis for NVIDIA
What Does The Institutional Ownership Tell Us About NVIDIA?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in NVIDIA. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at NVIDIA's earnings history below. Of course, the future is what really matters.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. NVIDIA is not owned by hedge funds. The Vanguard Group, Inc. is currently the company's largest shareholder with 8.2% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 7.3% of common stock, and FMR LLC holds about 5.0% of the company stock. In addition, we found that Jen-Hsun Huang, the CEO has 3.5% of the shares allocated to their name.
Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of NVIDIA
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
We can report that insiders do own shares in NVIDIA Corporation. Insiders own US$65b worth of shares (at current prices). It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 29% stake in NVIDIA. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand NVIDIA better, we need to consider many other factors. For instance, we've identified 1 warning sign for NVIDIA that you should be aware of.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
